RXI Butterfly Strategy
RXI (iShares Global Consumer Discretionary ETF), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.
The iShares Global Consumer Discretionary ETF is structured to closely follow the financial performance of a specific benchmark. This index consists of stocks from companies operating worldwide within the consumer discretionary industry.
RXI (iShares Global Consumer Discretionary ETF) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $249.6M, a beta of 1.05 versus the broader market, a 52-week range of 180.68-213.77, average daily share volume of 18K, a public-listing history dating back to 2006. These structural characteristics shape how RXI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.05 places RXI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. RXI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on RXI?
A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.
RXI snapshot
As of September 29, 2026, spot at $185.31, ATM IV 487.50%, IV rank 99.08%, expected move 139.76%. The butterfly on RXI below is built from the September 29, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 17-day expiry.
Why this butterfly structure on RXI specifically: RXI IV at 487.50% is rich versus its 1-year range, which makes a premium-buying RXI butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 139.76% (roughly $258.99 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RXI expiries trade a higher absolute premium for lower per-day decay. Position sizing on RXI should anchor to the underlying notional of $185.31 per share and to the trader's directional view on RXI etf.
RXI butterfly setup
The RXI butterfly below is built from the September 29, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With RXI at $185.31 on that close, the first option leg uses a $175.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RXI chain at a 17-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 RXI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $175.00 | $11.00 |
| Sell 2 | Call | $185.00 | $2.85 |
| Buy 1 | Call | $195.00 | $0.20 |
RXI butterfly risk and reward
- Net Premium / Debit
- -$550.00
- Max Profit (per contract)
- $388.38
- Max Loss (per contract)
- -$550.00
- Breakeven(s)
- $180.50, $189.50
- Risk / Reward Ratio
- 0.706
Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.
RXI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RXI. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$550.00 |
| $40.98 | -77.9% | -$550.00 |
| $81.95 | -55.8% | -$550.00 |
| $122.93 | -33.7% | -$550.00 |
| $163.90 | -11.6% | -$550.00 |
| $204.87 | +10.6% | -$550.00 |
| $245.84 | +32.7% | -$550.00 |
| $286.81 | +54.8% | -$550.00 |
| $327.79 | +76.9% | -$550.00 |
| $368.76 | +99.0% | -$550.00 |
When traders use butterfly on RXI
Butterflies on RXI are pinning bets - traders use them when they expect RXI to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
RXI thesis for this butterfly
The market-implied 1-standard-deviation range for RXI extends from approximately $-73.68 on the downside to $444.30 on the upside. A RXI long call butterfly is a pinning play: it pays maximum at the middle strike if RXI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RXI IV rank near 99.08% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on RXI at 487.50%. As a Financial Services name, RXI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RXI-specific events.
RXI butterfly positions are structurally neutral / pin (limited-risk, limited-reward); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. RXI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RXI alongside the broader basket even when RXI-specific fundamentals are unchanged. Always rebuild the position from current RXI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RXI?
- A butterfly on RXI is the butterfly strategy applied to RXI (etf). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With RXI etf at $185.31 on the September 29, 2026 close, the strikes shown on this page are snapped to the nearest listed RXI chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are RXI butterfly max profit and max loss calculated?
- Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the RXI butterfly priced from the September 29, 2026 end-of-day chain at a 30-day expiry (ATM IV 487.50%), the computed maximum profit is $388.38 per contract and the computed maximum loss is -$550.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RXI butterfly?
- The breakeven for the RXI butterfly priced on this page is roughly $180.50 and $189.50 at expiration, derived from the September 29, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The RXI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 139.76%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RXI?
- Butterflies on RXI are pinning bets - traders use them when they expect RXI to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
- How does current RXI implied volatility affect this butterfly?
- RXI ATM IV is at 487.50% with IV rank near 99.08%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.